The Future Is EVs … and Coffee

Thai fuel retailer prepares for influx of EVs.

March 30, 2021

Hot Coffee Cup

BANGKOK—Across the globe, governments have begun pushing for automakers to produce and sell more electric vehicles in an effort to cap and reduce auto emissions. In Thailand, the head of the biggest gas station network believes motorists will soon be stocking up on two different kinds of fuel—electric and coffee, reports Reuters.

Jiraporn Kaosawad, chief executive of PTT Oil and Retail Business (PTTOR), said the company will invest $1.5 billion to roll out thousands of coffee shops at home and abroad, along with other non-oil businesses, as the oil and fuel industries prepare for a future boom in electric cars. 

Jiraporn's plans call for Cafe Amazon—already the top coffee shop chain in Thailand—to present PTTOR's take on the huge task facing oil majors: how to maximize profits from fuel networks as EV drivers wait for their electrics cars to be charged. The success of these strategies will depend on mass acceptance of EVs by consumers.

(When NACS Convenience Summit Asia heads to Thailand in 2022, attendees will have the opportunity to visit PTT locations, including Cafe Amazon.)

"Our investments and partnerships have to build on the company's strength, and align with consumer demand," Jiraporn told reporters. "Charging EVs takes about 20 minutes, while you wait you can have a meal, buy things in the service station."

PTTOR's plans an additional 500 gas stations by 2025. Currently, PTTOR has 2,000 gas stations across Thailand and is aiming to rapidly increase the number equipped with EV charging points from the current 30 to 300 by 2022. That surge will come with the rise in demand produced by plans by the Thai government to have 1.05 million EVs on the road by 2025, about five times the current number.

But PTTOR's best-known product line outside of oil is coffee. First opening in 2002, Cafe Amazon stores are outlets offering coffee, cookies and similar merchandise for motorists at gas stations. Later, it expanded into a 3,000-store Starbucks-like chain, with standalone outlets and shopping mall locations. In the next five years, PTTOR aims to expand that network to 5,200.

Overseas, the company also operates a store in Singapore's Jewel Changi Airport and has branches in Cambodia, Japan, Oman, Vietnam and China. PTTOR's investments also include a 20% stake in an organic food restaurant, Ohkajhu, and a partnership in a cloud-kitchens venture, another name for ghost kitchens, a growing trend in the U.S. However, PTTOR model remains the retail network of stations of the PTTOR model that can provide more than gas remain the main point of interest and appeal for investors.

"The attraction is the station, not the oil," said Niwes Hemvachiravarakorn, a prominent Thai investor who doesn't own shares in PTTOR. "The gas stations have become a center for travelers, and through this, they can add products and services to expand business.”

Recently in the U.S., gas prices have bobbed up and demand, creating uncertainty as to where they will eventually settle as the pandemic subsides and EVs are pushed into the marketplace. With many customers questioning whether it is worth jumping over to an EV, governments have struggled with implementing the push. To prompt discussion of the implications of EV mandates and policies, the Fuels Institute also recently published “Policy Considerations: Proposals to Ban the Sale of Combustion Engine Vehicles” to assist governments and policymakers attempting to promote these initiatives.

Be sure to read “Hot Beverage Reboot” in NACS Magazine for more on how coffee can impact your sales.

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